Mike Sumruld Senior Vice President and Chief Financial Officer Deutsche Bank 27 th Annual Leveraged Finance Conference September 2019 PKD (NYSE) 1 Rig 273 Alaska
Forward-Looking Statements Caution The following presentation contains certain statements that may be deemed to be “forward -looking statements” within the meaning of the securities laws of the United States. All statements, other than statements of historical facts, addressing activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, the outlook for equipment and utilization and day rates, general industry conditions including bidding activity, future results of the Company’s operations, capital expenditures, income tax matters, expansion and growth opportunities, financing activities, debt repayment, returns on capital, cash flows and other such matters, are forward-looking statements. Although the Company believes its expectations stated in this presentation are based on reasonable assumptions, actual results may differ materially from those expressed or implied in the forward-looking statements. For a more detailed discussion of risk factors, please refer to the Company’s reports filed with the SEC, including reports on Forms 10-K and 10-Q. Each forward-looking statement speaks only as of the date of this presentation, and the Company undertakes no obligation to publically update or revise any forward-looking statement. Non-GAAP Measures: Included in this presentation are certain non‐GAAP financial measures as defined under SEC Regulation G. Investors are urged to consider closely the disclosure in Company’s Annual Report on Form 10 ‐K, Quarterly Reports on Form 10 ‐Q and Current Reports on Form 8 ‐K and any reconciliation to GAAP measures provided in this presentation. 2
Parker Drilling A service- driven company, we offer “operational execution” services and products to mitigate risk and control costs so our customers can deliver safe and profitable wells. Team Capital Scale in Key Oriented and Strong Efficient Geographies ROC Continual Brand Equity Business and Product Company Improvement Model Lines Culture • Reliable partner, trusted • Drives a motivated and • Maximize return on • Enhances operating • Delivers share advisor educated workforce capital leverage and economies appreciation • Key role in customer • Promotes enterprise • Enhance flexibility in a • Facilitates the return of of scale • Optimizes resource success alignment cyclical industry capital • Known for operational • Serves in the best interest allocation • Enrich market intelligence execution of stakeholders • Absorbs industry volatility 3
Operational Execution Defined • • Values Needs Customer • • Objectives Requirements Alignment • Project Assessment Optimized Planning & • • Right People Right Certifications • • Drilling Cycle Right Tools Competency Assurance Resources • • Procedural Compliance Accountability Operational • • Quality & HSE Focus Empowerment Increased Performance Discipline • Teamwork Increased Reliability Reduced Cost Reduced Risk • • KPIs Improvement Plans Continual • • Assessment Knowledge Transfer Improvement • Review 4
Where We’re Heading 2012 Current 1 15% 36% Grow scale in target 46% Rebalanced revenue mix by geographies and product 51% investment bias toward capital lines based upon capital efficient opportunities 34% efficient platform 18% Revenue $678 M Revenue $566 M Total Rentals O&M Owned Rigs 5 1 LTM as of 2Q’19
Scale in Key Geographies Approximately 95% of our revenue comes from three key geographies Middle East & Caspian Arctic North America Revenue: 18 % of Total 2018 Revenue: 36 % of Total 2018 Revenue: 40 % of Total 2018 Drilling and Rental Services: Services: Drilling Services: Drilling and Rental Locations: Kazakhstan, Kuwait, Saudi Locations: Sakhalin Island, Alaska, Locations: U.S (Lower 48), Mexico Arabia, Iraq, UAE Atlantic Canada 6 Other countries of operation
Company Overview Adjusted EBITDA excluding G&A 2 by Business Revenue by Business $ millions $ millions 350 1,200 300 1,000 250 134 800 348 200 600 247 150 82 290 400 134 100 256 183 621 161 14 116 465 53 200 97 50 104 293 276 260 225 19 6 51 37 - - 1 1 2014 2015 2016 2017 2018 LTM 2014 2015 2016 2017 2018 LTM Drilling Rentals Drilling Rentals • 85-year history of delivering operational excellence to United States 44% International the oil and gas industry 56% • Operated in 65 countries, currently active in 20 Offshore • Headquartered in Houston, Texas 34% Onshore • Dedicated global workforce totaling ~2700 employees 66% 7 7 1 LTM as of 2Q’19 2 Adjusted EBITDA excluding G&A is a non-GAAP measure. Please refer to the appendix for the definition and reconciliation.
Rental Tools & Well Services Overview Revenues by Geography 1 • High return, quick payback investment opportunities Middle East / Caspian • Diversified product offerings across core geographies 17% • Surface & Tubulars – drill pipe, tubing, drill collars, North Sea pressure control equipment, and more 5% • Well Construction – tubular running services and North Other downhole tool rentals America 6% • Well Intervention – fishing and related services and 72% whipstocks Revenues by Product Offering 1 • A leading supplier in U.S. land and offshore Gulf of Mexico markets Well Intervention 2% • A solid international platform with major presence in the Well Construction 14% Middle East • Opportunities to expand by leveraging existing infrastructure Surface & Tubular and resources 84% 8 8 1 LTM as of 2Q’19
U.S. Rentals – Leading U.S. Supplier U.S. Rental Revenues by Market 1 Unique Operating Strengths • Well developed infrastructure – presence in U.S. Offshore every major U.S. basin 26% • Diverse mix of customers and outstanding customer service • Engineering and QHSE capabilities for 74% U.S. Land servicing offshore and high-profile projects • Leading supplier of premium drill pipe Parker U.S. Rentals Growth vs. US Rig Count 3 Q2 ‘ 16 vs Q2 ‘19 180% 160% 140% 120% 2 % Δ Avg US Rig Count % Δ Tubular Utilization Index % Δ US Rental Revenue 1 LTM as of 2Q’19 2 The Parker U.S. Tubular Goods Utilization Index represents the proportion of tubular goods (drill pipe and related products) that were on rental compared to the total inventory of 9 9 tubular goods, and indexed to a base level of tubular goods inventory on rental. Tubular goods rentals do not account for all th e U.S. Rental Tools segment’s revenues . 3 Source Baker Hughes-GE rig data
Leader in New Drill Pipe Technology Early adoption of new drill pipe technology, coupled with our focus on operational execution, helps our customers deliver increasingly complex wells more efficiently Benefits U.S. Land Well Lateral Lengths & Efficiencies Performance • 10,510 1,348 Williston 2014-2018 High strength tool joints Williston 2014-2018 10,100 1,009 • Higher torque rating 8,947 596 PRB 2014-2018 PRB 2014-2018 6,588 453 • Improved hydraulic 9,735 Midland 2014-2018 833 Midland 2014-2018 • 8,505 762 Better fatigue resistance 6,798 Mid-Con 2014-2018 774 Mid-Con 2014-2018 5,704 611 Ease of Use 7,498 Gulf Coast 2014-2018 1,137 Gulf Coast 2014-2018 6,452 984 • Faster make up times 8,881 DJ 2014-2018 1,565 DJ 2014-2018 • 7,056 Minimizes stabbing damages 1,334 • 8,236 Improved tong gripping Delaware 2014-2018 711 Delaware 2014-2018 6,489 610 9,714 Appalachian 2014-2018 1,102 Appalachian 2014-2018 7,627 931 Lower Maintenance Cost 8,660 Anadarko 2014-2018 651 • Anadarko 2014-2018 6,683 Reduced repair frequency 536 • Increased refacing amount 2018+ Avg. Lat Length (ft) 2014-2018 Avg. Lat Length (ft) 2018+ Avg. ft/d 2014-2018 Avg. ft/d • Less recut loss Source: DrillingInfo DI Rig Analytics 10
International Rentals - Improving Performance Forward Plan Revenue Scale in Core Markets • Focusing on scale in core markets with Current 1 2014A sustainable activity • Automated Casing Running Tool (CRT) performance exceeding competitive technologies • Leverage Well Construction success to pull through additional product lines Revenues by Product Offering 1 Well Construction Revenues Growth Well Intervention $ millions 5% Well Surface & Tubular 10.6 10.6 10.4 10.0 9.9 Construction 45% 8.6 8.5 7.6 6.3 50% 6.1 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 11 1 LTM as of through 2Q’19
Drilling Services Overview Revenues by Geography 1,2,3 • Expand capital efficient O&M through North America: 16% Owned Rigs: 16 technical service and operational resources Other: 0% O&M Rigs: 1 Owned Rigs: 2 O&M Rigs: 2 • Onshore, offshore, remote and harsh- Arctic: 62% Middle East / Owned Rigs: 3 environment expertise Caspian: 22% O&M Rigs:6 Owned Rigs: 8 O&M Rigs: 37 • Highly capable fleet to meet complex drilling requirements Revenues 1,2 by Arena • Developing scale in large and growing Offshore international markets 44% 56% Land 1 LTM as of 2Q’19 2 Excluding reimbursable revenue 12 12 3 Rig count as of June 30, 2019
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